Scaling solar energy in Tanzania

Alejandro Litovsky

March 31, 2009

There is no scarcity of sun. But the sheer scale of the challenge to create solar energy solutions in Tanzania is daunting. Will energy entrepreneurs ever succeed? John Keane, SolarAid‘s director of programmes in Dar es Salaam, is setting up a micro-franchising model to help poor people start small businesses that sell solar power products, but he is quick to point out the need to think strategically about their next steps: ‘scaling up this model will require a different type of infrastructure where we can leverage other existing distribution networks.’

It is difficult to create new businesses where the market doesn’t exist, and this is SolarAid’s challenge. Building a market infrastructure will require the coordinated action of investors, skills-building programs, and government agencies. Enabling this connectivity is the goal of the Rework the World initiative, a global partnership between the Tällberg Foundation and Youth Employment Systems (YES Inc.), which the Volans’ Pathways to Scale program is supporting.

On May 7th 2009, we are convening a workshop in Dar es Salaam in partnership with the Entrepreneurship Center at the University of Dar es Salaam’s Business School. The session ‘Reworking Energy’ will bring together SolarAid with other entrepreneurial initiatives, youth networks, business and investors, to catalyze some of the partnerships that are needed to scale.

The Rural Energy Foundation will be there. They are another market pioneer in Tanzania, which is helping retailers across the country market solar products by creating the much needed ‘industry information’ about products and suppliers. Godwin Msigwa, its managing director, will be coming to the session in May with proposals of how to scale up their work beyond the 50 retailers with whom they currently work.

TaTEDO, the Tanzanian Traditional Energy Development Organization, is another key player in this ecosystem. ‘Energy policy in Tanzania is set at the national level’ says Oscar Lema, its director for entrepreneurship and finance, told me. Top-down approaches to energy planning don’t work well to build local capacity and grassroots innovation. ‘We need to think about providing energy through enterprise’, he adds. ‘This requires a coordination of policies, technology options, finance, business skills, as well as both community and enterprise development.’ Working in 27 Districts across 10 Regions, TaTEDO is advancing district-level energy frameworks by creating small working groups that bring together government, community-based organizations, skill programmes, finance providers, and rural entrepreneurs. TaTEDO’s model is critical to scale the policy impact of entrepreneurs.

In the village of Vingunguti, a group of young people that have been trained by TaTEDO on how to build clean stoves have formed an enterprise that designs and produces more efficient coal stoves, the primary form of cooking in the country. Against all odds, they are now producing 15.000 stoves a month and employing 40 young artisans.

This is possible because TaTEDO has brought finance providers into the equation. Their collaboration with Savings and Credit Cooperative Societies (SACCOS) and actors implementing the Village Community Banks (VICOBA) have been first explorative steps towards what Oscar Lema calls ‘building local level institutional structures’ for scaling up energy access in rural areas. There is much work to be done to strengthen the conditions for local financial services for the poor, where initiatives such as the Financial Sector Deepening Trust (FSDT) are playing a key role. Moving to more robust financial services for the poor is seen as an essential blocks on which to build new energy alternatives.